BANKS will have to behave more like building societies in future, the chief executive of Principality claimed.

BANKS will have to behave more like building societies in future, the chief executive of Principality claimed.

Speaking as Wales’ biggest mutual produced another solid set of annual results, Peter Griffiths said that in the wake of the Government-endorsed Vickers Report, which recommended a split between retail and investment banking, banks would need to show the same prudence typified by the mutual model.

“The whole mutual business model is by definition far more prudent,” he said.

“What you are seeing in a post Vickers world is that the banks will be asked to behave more like building societies.”

But a prudent approach for the Principality certainly does not mean standing still or retrenching.

While some banks and mutuals have curtailed their lending as they seek to pare down their balance sheets, Principality loaned £1bn in 2011, and increased mortgage lending by 6.5% on 2010.

In the current climate, Mr Griffiths regards that £1bn figure as a particularly significant achievement.

During the year to December 31, the group also delivered a pre-tax profit of £24.5m. This was down on a figure of £30.8m posted in 2010, but came in a year in which the society made a major investment in its information technology systems.

The Principality attracted 38,000 new customers in 2011. Of those 29,000 were savers

And while there has been increasing competition in the mortgage market, Mr Griffiths is confident the Principality can more than hold its own in the year to come.

“We loaned a billion pounds last year and we can do that again in 2012,” he added.